INCOME AND NON-MONETARY BENEFITS TAX (AMENDMENT) BILL, Bill No. 29 o/2oi6 OBJECTS AND REASONS

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1 [24th October 2016] Supplement to Qfficial Gazette INCOME AND NON-MONETARY BENEFITS TAX (AMENDMENT) BILL, 2016 Bill No. 29 o/2oi6 OBJECTS AND REASONS S The Bill seeks to amend sections 2, 5,9, 10, 13 and the First Schedule and the Second Schedules of the Income and Non-Monetary Benefits Tax Act for the purpose of introducing the progressivtincomc tax policy of th (iovernrncnt. The Bill inter alia seeks to amend (a) section 2 to include the definition of primary employer and secondary employer ; (b) section 5 to enable the Government to prescribe by regulations the rate ofwithholding tax by secondary employers; for declaration of primary employer and secondary employer by the employed person; for declaration of low income to the secondary employer by a citizen of Seychelles and to impose additional tax on employed person who declares more than one employer as primary employer and who fails to withdraw a low income declaration when his emoluments falls under income tax liability; (c) section 9 to empower the Revenue Commissioner to recover tax (e) section 13 to provide that the provisions of the Revenue Administration Ac to apply for claiming refund oftax paid; and from the employed person in cases where the employer is not obliged to withhold tax; (d) section 10 for providing the filing of payroll statement and annual reconciliation statement to the Revenue Commissioner and furnishing the withholding tax statement to the employed person and to use the National Identity Number for identification and cross checking the tax liability ofan employer person;

2 Ii Supplem en! to Official Gazette [24th October 201 6J U) to substitute First Schedule to provide the new rates of tax under the progressive income tax regime and to substitute the Second Schedule for providing the exempt emoluments under the Act. Dated this 24th day of October, Rd. (;0vINDEN ATTORNEY-GENERAl. A - t ê a :- -. t i, If I, F, k.l tt, ) ft I, P ct-jt lç;,1-l I 1t tpi - 7!cz:::-::i.i,t rt;,j 7I fl % I

3 [24th October 2016] Supplement to Official Gazette in INCOME AND NON-MONETARY BENEFITS TAX (AMENDMENT) BILL, 2016 (Bill No ) 4 9 ABILL OF AN ACT to amend the Income and Non-Monetary Benefits Tax Act (Cap 273). ENACTED by the President and the NationalAssembly. Short title, J.(1) This Act may be cited as the Income and Non- ofl1incncemcnt Monetary Benefits Tax (Amendment) Act, and apphcacion (2) This Act shall apply to citizens of Seychelles with effect from I stianuan, 2017 and to the non-citizens with elect from lstiu)y,20fl. (3) Notwithstanding subsection (2) the non-citizens shall continue to pay income tax for the penod from 1st January to 30th June, 2017 at the rate applicable to them before the coming into operation of this Act.

4 - : - iv Supplement to Official Gazette [24th October 2016) Amendment of 2. The Income and Non-Monetary Benefits Tax Act is Cap 273 hereby amended as follow s (a) insection2 a. by inserting after the definition prescribed the following definition primary empwyer means an employer to whom the employed person makes a declaration under section ao by inserting after the definition of Revenue Commissioner the following definition secondary employer means an employer other than a primary employer declaredbytheemployedperson; ; (b) insection5 (I.) by repealing in subsection (1) the words as prescribed and substituting therefor the words in the manner as may be prescribed ; (ii) by inserting after subsectionu), the following subsections (IA) An emplo9ed person may declare an employer as his or her primary employer for the purpose of deciding the rate of withholding tax which may be prescribed. (I B) An employed person shall not have more than one employer

5 employer Air [24th October 2016] Supplement Jo Qfiucial Gazette v 3tL declared as the primary employer at any one point of time during a tax year. (IC) Anyemployernotdeclared as the primary employer under subsection 5(lA) shall be considered as secondary employer for the purpose of withholding tax. - (I D) For the purpose of this section an employed person who is a citizen of Seychelles may make, in a tax year, a low income declaration to the secondary employer in the form and I;-: manner as may be prescribed. (I E) When a decl&ation is made under subsection (ID) no tax shall be withheld by the secondary employer. (if) An employed person shall withdraw a low income declaration made under subsection (1D) as and when his or her emoluments fall under the income tax liability under thisact ; UiO by inserting after subsection (4) the following subsection (4A) An employed person who )k& fr (a) declares more than one as primary employer under subsection (lb),or (b) fails to with&aw a low ii :, - - income declaration under subsection (1F),

6 a withhold. ; I, National Identity Number furnished by the employer! ; vi i Supplernent to Official Gazette [24th October_2016] provided in section 44A of Revenue. Jn t shall be liable for an additional tax as AdministrationAct (Cap 30%) ; (e) by inserting after section 9(1), the following subsection (IA) Where an employer is not obliged to withhold, tax, the Revenue Commissioner may recover from the employed person the tax that should have been withheld ifthe employer were obliged to (d) by repealing section I 0 and substituting therefor the following section 1O.(l) An employer withholding tax underseetion 5 shall furnish (a) a monthly payroll statement and an annual reconciliation statement to the Revenue Commissioner; and (b) a monthly pay slip and a withholding tax certificate to the employed person, in the manner and form as may be prescribed. (2) Notwithstanding section 35 of the Revenue Administration Act (Cap 308), for the purpose of identification and cross checking the employed person s tax liability, the Revenue Commissioner may rely on the *1

7 -4 [24th October 2016J Supplement to Official Gazette vu (e) by repealin section 13 and substituting therefor the following 13.(l) Subject to this Act and the withholding tax certificate under section 10, the tax withheld tinder section 5 is a final tax on the emoluments of the employed person. (2) Where an employed persdh claims any refund of tax, section 29 of thq Revenue Administration Act (Cal) 308) shall apply. ; (I) by repealing the First Schedule and the Second Schedule and substituting therefbr the following Schedules FIRST SCHEDULE RATES OF INCOME TAX I. The income tax payable by an employed person who is a citizen of Seychelles, in respect of gross emoluments received during a tax year from all sources of employment shall be as follows TAX PAARLE NIL EMOLUMENTS Not exceeding SRI 02,666 15% of the amount in excess of Exceeding SR but SRI 02,666 not exceeding SRI2O,000 Exceeding SO SR2,600 plus 20% of the amoun in excess of SRI2O,000 not exceeding SRI.000,000 SRI7X,600 plus3o%ofthe Exceeding SRI,000,000 j amount in excess ofsri,

8 viii Supplement to QfJicial Gazette [24th October 2016] 2. Subject to paragraph 3, the income tax payable by an employed person who is not a citizen of Seychelles, in respect of gross emoluments received during a tax year from all sources of employment shall be as follows EMOLUMENTS Not exceeding SRI 20,000 Exceeding SR but not exceeding SRI,000,000 Exceeding SRI,000,00D excess. TAX PAYABLE 15% of the amount SRI8,000 pius 20% of the amount in excess of SRI2O,000 5R194,000 pius 30% o1thc amount in of SRI,000, Paragraph I applies to the emoluments of an employed person who is not a citizen of Seychelles (a) where a person is entitled to the same emoluments as a citizen of Seychelles under an international agreement referred to in section 79 of the Business Tax Act (Cap 20); or (b) where a person falls under an approved scheme ofsen ice as may be prescribed. SECOND SCHEDULE EXEMPT EMOLUMENTS [Section 4(3)] The following are exempt emoluments (a) (b) an emolument derived by a person entitled to privileges under the Privileges and Immunities (Diplomatic, Consular and International Organisations) Act; an emolument derived by a priest or other similar representative of a recognised religious organisation;

9 II 1.. [24th October 2016) Supplement to Official Gazette ix I I (c) an emolument being a reimbursement for the use of a motor vehicle provided to the employed person by the employer provided that a logbook is maintained by the employed person; :1 (d) an emolument being a reimbursement by an employer of an employed person for the cost ofusing the employee s own motors veb I ci e for the benefit of the employer wherethe reimbursement does not exceed the amount as may be prescribd; t7 Explanation: For claiming exemption under \k this paragraph a log book is required to be kept. f (e) an emolument being a per diem paid to an 4 employed person on overnight travels, for I lodging, ñieals, taxi, ground transportation fees and other, incidental expenses for business purposes at the rate not exceeding an amount as may be prescribed; t 4 an emolument being a uniform allowance; 1; (g) a compensation payment to the extent that W the compensation is paid pursuant to section 62A (1) (b) of the Employment Act; and Ci) the concessionary treatment compensation payment is pursuant to section 47(2)(b)(i) EmploymentAct(Cap69); of such capped of the (h) retirement pension provided under the Social Security Fund and the Seychelles Pension

10 x Supplement to Official Gazette [24th October 2016] Fund or any other pension provided under any other written law. Transitional 3.(J) The gross amount of emoluments to be taken into provisions consideration for the purpose of calculating the tax liability of an employed person who is not a citizen of Seychelles, for the period from lst January to 30th June, 2017 shall be the ross emoluments received by that employed person for that period. (2) The lax liability of an employed person who is pot a citizen of Seychelles in felationto his or her gross emoluments received for the period from 1st July, 2017 to 31st December, 2017 shall be at the rates provided below flemoluments Exceeding SR 60,000 hut floe L eceedingsr50o0o Exceeding SR500,000 TAX PAYABLE 15% of the amount SR9,000 pius 20% of the amount in excess of SR6O,000 SR97,000 plus 30% of the amount in excess of 5R500,000